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IBM Has Little Reason to Buy Research In Motion Unit

Written by: James Rogers08/10/12 - 2:46 PM EDT

Tickers in this article:
RIMM IBM

NEW YORK ( TheStreet) -- Rumors that IBM(IBM) has expressed an interested in buying part of Research In Motion (RIMM) breathed life into the embattled handset maker's shares. But it makes little sense.

Citing two people familiar with the matter, Bloomberg reported that IBM made an informal approach about acquiring the division that operates a network of secure servers supporting BlackBerry users. The unit could be valued at $1.5 billion to $2.5 billion.

For RIM to carve off a crucial part of its business ahead of next year's much-delayed BlackBerry 10 launch would be a strange move. While the Canadian firm has struggled with delayed product launches and intense competition in recent years, BlackBerry security remains one of the company's biggest selling points.

"It would be like removing one of your most important organs -- enterprise services is very much entwined with the BlackBerry offering," said Ron Gruia, principal analyst at Frost & Sullivan. "RIM has waited this long, they may as well wait and see what happens with BlackBerry 10 phones next year."

CEO Thorsten Heins recently discussed the possibility of licensing the BlackBerry 10 platform to other manufacturers in an interview with the U.K.'s Telegraph newspaper. "You could think about us building a reference system, and then basically licensing that reference design, have others build the hardware around it -- either it's a BlackBerry or it's something else being built on the BlackBerry platform," he said. "We're investigating this and it's way too early to get into any details."

That raises the possibility of another company, say, handset giant Samsung, forging a licensing deal with RIM.

A licensing deal is a much more plausible outcome than IBM acquiring the firm's enterprise services business.

As for IBM, with $11.2 billion of cash on hand, Big Blue could easily afford RIM's enterprise services business. Nonetheless, it's not clear that the deal would make sense for the hardware and software giant.

The Armonk, N.Y.-based firm intends to spend $20 billion on acquisitions by 2015, although many of its largest deals in recent years, such as Cognos and Sterling Commerce , have focused on expanding its software empire.

Crucially, IBM acquisitions are typically accretive to earnings on both a GAAP and non-GAAP basis in the second year after the deal's completion. There has to be a question mark over whether this would be achievable with a division from the struggling Research In Motion.